Landowner Benefits

There are many benefits for being part of a well unit. The primary benefit is economic. Landowners are entitled to 1/8 (12.5%) of gross well production, or what is known as an override interest. Over the life of an oil well, even an average well, this can amount to tens of thousands of dollars. The landowner who owns the property where the well is located receives free natural gas in addition to his or her portion of the royalties. Free natural gas will cover the landowners heating and other household energy costs, which will add up to thousands of dollars in savings over the years (see chart below).

Landowner Revenues

Amount

Description

200,000 MCF

Recoverable Gas Reserves

$7.00

Gas Price per MCF

12.5%

Landowner Royalty Percentage

$1,400,000

Gross Revenue

$175,000

Total Landowner Royalties (Life of Well)

Free Natural Gas

Amount

Description

250 MCF

Amount of Free Gas per Year

$14.00

Market Rate

$3500

Value of Gas per Year

$87,500

Amount of Free Gas over life of well (25 years)

Many landowners are happy to know that they can sell their property with or without their mineral rights and their royalties. This means that landowners have the option of continuing to receive oil and gas royalties even after they are no longer living on the property. If the landowner decides not to keep the mineral rights, the royalties can serve as an incentive to potential buyers in the sale of the property.

Cutter Oil has a proven ability to get the most out of our wells. Our wells produce more in the beginning and have a much longer life than any competitor, ultimately translating into more money for our landowners.